State Tracker Updated June 15, 2026

Alabama: what the PBM reimbursement law requires

Alabama bars PBMs from reimbursing a pharmacy below the state Medicaid rate — the Alabama Medicaid drug benchmark plus its professional dispensing fee — and prohibits clawbacks below that floor.

Status	Enacted
Law	Alabama Community Pharmacy Relief Act — Act 2025-136 (SB 252), Ala. Code § 27-45A-13
Effective date	Floor effective October 1, 2025 (signed April 15, 2025)
Reimbursement basis	A PBM may not reimburse for dispensing a prescription drug in an amount less than the Medicaid reimbursement rate in effect on the act's effective date — Alabama's Medicaid drug benchmark plus the Medicaid professional dispensing fee — and may not claw back below that floor. Drugs paid for by the Medicaid program are carved out.
Professional dispensing fee	Tied to the Alabama Medicaid professional dispensing fee, which is set by Medicaid rule rather than fixed in this statute
Appeal route	Pre-existing MAC appeal mechanism under Title 27; the floor itself is enforced by the Department of Insurance

Alabama is a reimbursement-floor state. Under the Alabama Community Pharmacy Relief Act (Act 2025-136), effective for the floor provision on October 1, 2025, a pharmacy benefit manager may not reimburse a pharmacy less than the Alabama Medicaid reimbursement rate — the state’s Medicaid drug-cost benchmark plus the Medicaid professional dispensing fee — for a covered drug, and may not recoup payment below that level after the fact.

The floor is set by reference to the Medicaid rate rather than a fixed dollar figure, so the exact dispensing-fee component follows the Alabama Medicaid Agency’s rule. Drugs paid for by the Medicaid program itself are excluded from the no-variation rule. The enrolled act is linked above.

Sources

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